E-filing of excise returns from June 30

EXCISE assessees can start filing on-line returns from June 30. The Central Board of Excise and Customs (CBEC) has extended the facility of e-filing of returns - ER-1, ER-2 and ER-3 - to manufacturers of excisable goods, EOUs and registered dealers on a monthly and quarterly basis. Assessees and registered dealers who have been allotted 15 digit Excise Control Code are entitled to avail this facility. Both monthly returns of June' 04 and quarterly return of April-June' 04 can be filed on-line.

The facility of e-filing is optional for the present as it is likely to take sometime for all assesses to file returns electronically. Assesses maintaining computerised data would find filing simpler, as a software would be provided to structure and transmit the data.

[Source : The Economic Times]

Govt to notify 74% FDI cap in private banks soon

THURSDAY, FEBRUARY 26, 2004 01:50:28 AM

NEW DELHI : The government will soon come up with detailed guidelines for private banks including hike in the foreign holding from 49 to 74%  and allowing foreign banks to set up subsidiaries in the country.

“We have given the papers to department of industrial policy and promotion. It (notification) may come tomorrow,” secretary for financial sector, NS Sisodia, said. The guidelines are being awaited by a host of private banks like Centurion Bank, Global Trust Bank, IDBI Bank, who want to increase their capital base and carry out expansions. Foreign banks like HSBC, ABN Amro Bank, Standard Chartered Bank and Nova Scotia are also eyeing subsidiaries in India following the relaxation of the FDI norms.

Although the Cabinet had approved the proposal for  hiking FDI ceiling in private banks on January 15, the finance ministry and the Reserve Bank were fine-tuning the guidelines.

The FDI hike in banking sector was first suggested by the NK Singh panel but the finance ministry and RBI had added a slew of stringent conditionalities to prevent ownership of  banks going into wrong hands. Sources in the ministry said the guidelines would allow FDI ceiling to go up to 74% from the present 49% but the investors mandatorily need to get a credit rating and RBI’s nod. The overall 74% foreign holding would include foreign direct investment (FDI), foreign institutional investments (FII), NRIs, initial public offers, private placements and ADRs/GDRs.

The FDI ceiling will not be applicable for PSU banks while limit remains at 26% for insurance companies. Applications for foreign investments in private banks having joint ventures in insurance sector would be addressed to RBI for consideration in consultation with Irda.This is necessary to ensure that the 26% equity cap in insurance sector is not being breached. 

[Source : The Economic Times]

Govt to modify DEPB rules

 WEDNESDAY, FEBRUARY 25, 2004 12:07:38 AM

NEW DELHI: In a move to de-incentivise steel exports to check rising local prices, the government decided to modify DEPB rules.

Steel producers exporting to countries with whom India has a preferential trading agreement or a free trade agreement at a preferential tariff, will get DEPB (duty entitlement passbook scheme) benefits, only to the extent of the duty paid. They will not be accorded a flat rate, which is usually higher. This move follows steel exporters claiming DEPB benefits despite exporting the commodity at 0% duty. – Agencies

The authorities hope that the new rules will curb misuse of the scheme. This will also check domestic prices, they added. The government is also examining the possibility of cutting DEPB rates for steel exports, sources  said.

[Source : The Economic Times]

Up to 74% FDI ceiling hike in private banks soon

PTI[ WEDNESDAY, FEBRUARY 25, 2004 06:29:27 PM ]

NEW DELHI: The government will soon come up with detailed guidelines for private banks including hike in the foreign holding from 49 to 74 per cent and allowing foreign banks to set up subsidiaries in the country.

"We have given the papers to Department of Industrial Policy and Promotion. It (notification) may come tomorrow," Secretary for financial sector, N S Sisodia, said on Wednesday.

The guidelines are being awaited by a host of private banks like Centurion Bank, Global Trust Bank, IDBI Bank, who want to increase their capital base and carry out expansions.

Foreign banks like HSBC, ABN AMRO Bank, Standard Chartered Bank and Nova Scotia are also eyeing subsidiaries in India following the relaxation of the FDI norms.

Although the Cabinet had approved the proposal for hiking FDI ceiling in private banks on January 15, the Finance Ministry and Reserve Bank were fine-tuning the guidelines.

The FDI hike in banking sector was first suggested by the N K Singh panel but the Finance Ministry and RBI had added a slew of stringent conditionalities to prevent ownership of banks going into wrong hands.

Sources in the ministry said the guidelines would allow FDI ceiling to go upto 74 per cent from the present 49 per cent but the investors mandatorily need to get a credit rating and RBI's nod.

The overall 74 per cent foreign holding would include foreign direct investment (FDI), foreign institutional investments (FII), NRIs, initial public offers, private placements and ADRs/GDRs. The FDI ceiling will not be applicable for PSU banks while limit remains at 26 per cent for insurance companies.

[Source : The Economic Times]

Last date for filing of TDS returns extended till March 31

PTI [MONDAY, JANUARY 12, 2004]

NEW DELHI : The last date for filing of TDS returns has been extended by six months to March 31 in view of certain administrative difficulties.

An official release said the government had extended the filing of TDS returns to September 2003 and now it had been extended till the end of this fiscal.

[Source : Economic Times]

Demat mode for property registrations likely

The finance ministry proposes to set up a dedicated depository for facilitating use of stamp papers in demat form and registering property deals across the country. Sources divulged that the Revenue Department has been asked to initiate the process for setting up the depository in consultation with states. States like Andhra Pradesh, Karnataka and Maharashtra have already been sounded out on the depository for stamp papers in demat form.

ESI raises wage ceiling to Rs. 7,500

The Employees' State Insurance Corporation (ESIC) decided to enhance the wage ceiling for purpose of coverage of employees under the scheme from the existing Rs 6,500 per month to Rs. 7,500.

The new ceiling would come into effect shortly, an official release said. The ESIC cover is given to employees in the private sector towards their medical treatment.

Employees up to a certain salary-scale have to pay a monthly premium for this purpose.

[Source : Business Standard, December 17, 2003]

Government gets time to amend Competition Act  

The Supreme Court allowed the Centre more time to amend the Competition Commission Act, at the request of Attorney General Soli Sorabjee. The case will now be heard on January 30.

Sorabjee said the government was not in favour of deleting any particular provision in the law, and two ministers were taking a comprehensive look at it, for which more time was needed.

During the last hearing, Chief Justice V N Khare had asked the government to delete the provision (Section 39) in the legislation, which sought to make the high court the executing court for orders passed by the commission.

The court had said such a provision would affect the independence of the judiciary as the commission, which was mostly staffed with bureaucrats under the existing Act, would be above the high court. The court had expressed serious reservations about such a scheme of things. Sorbajee had sought time then to consider the changes in the law. The sought more time to make the necessary changes.

The petitioner, Brahm Dutt, had challenged the appointment of former Commerce Secretary Dipak Chatterjee to the head of the commission. Since then the appointment has been frozen.

The court has objected to the policy of appointing bureaucrats to quasi-judicial bodies.

The judges had observed that if this was allowed, the government would fill all the posts of judges with bureaucrats.

[Source : Business Standard, December 17, 2003]

SEBI seeks more powers under Companies Act

The turf war between the Department of Company Affairs (DCA) and Securities & Exchange Board of India (SEBI) for overseeing the functioning of the listed companies continues unabated.

The capital market regulator, it appears, is still not happy with the powers vested with it under the Companies Act, 1956, in respect of listed companies and has asked for more.

Official sources confirm that SEBI has now written to the Finance Ministry seeking more powers under the Companies Act for monitoring the listed public companies. However, the capital market regulator's letter is said to be silent on the provisions under the Act it would like to administer. At present, Section 55 A of the Act confers SEBI the right to administer certain provisions relating to the issue and transfer of securities and non-payment of dividend in the case of listed public companies and those companies that intend to get their securities listed.

Companies Act currently stipulates that all powers relating to all other matters including those relating to prospectus, statement in lieu of prospectus, return of allotment, issue of shares and redemption of irredeemable preference shares shall be exercised by the Central Government, Company Law Board, Registrar of Companies as the case may be.

Informed sources said, there is no meeting point between the DCA and SEBI on the powers that need to be further conferred upon the capital market regulator for monitoring the listed companies.

"What more powers do they want? They already enjoy powers under Section 55 A. If they desire more, they will have to clearly spell out and for this discussions are needed between all concerned," Finance Ministry sources.

The tussle between the two regulators for overseeing the functioning of listed companies has been there for the last number of years leaving India Inc sometimes crying foul on the regulatory overkill.

The composition of a company's board is one issue on which the last word is yet to be written by the regulators, say corporate observers.

[Source : Business Line, December 16, 2003]

Govt to raise FDI cap in private banks

REUTERS [TUESDAY, DECEMBER 16, 2003]

NEW DELHI: The government has approved plans to increase the limit on foreign direct investment in private banks, Finance Minister Jaswant Singh said on Tuesday.

In the Union Budget unveiled in February, the government had announced its intention to raise the foreign direct investment limit in private banks to 74 per cent from 49 per cent.

"The government has taken an in-principle decision to enhance the limit on foreign direct investment in banking companies to facilitate setting up of subsidiaries by foreign banks and to invite investment in private sector banks," Singh said in a written reply to a lawmaker's question.

He said the modalities for implementing the decision were being worked out.

British lender HSBC Holdings recently bought a 14.71 per cent in UTI Bank from other investors, with an option to buy another 5.37 per cent later. It plans an open offer to pick up an additional 20 per cent subsequently.

Private sector banking shares have rallied in recent trading sessions as the market expects similar deals in the sector after the government's decision to hike foreign investment.

[Source : Economic Times]

Father can gift ancestral property to daughters: SC

PTI [SUNDAY, DECEMBER 14, 2003]

NEW DELHI: In a major judgement, the Supreme Court has ruled that a father can gift a reasonable portion of his ancestral immovable property to daughters at the time of their marriage or even long after their marriage.

This ruling was given by a Bench comprising Justice R C Lahoti and Justice Ashok Bhan while settling a 15-year-old dispute between a father and his daughters in Salem District of Tamil Nadu in favour of the latter by setting aside a trial court order which was upheld by the Madras High Court.

Considering several rulings of the apex Court, the Bench said "it can safely be held that a father can make a gift of ancestral immovable property within reasonable limits, keeping in view the total extent of the property held by the family in favour of his daughter at the time of marriage or even long after her marriage".

The father, Raja Gounder, had gifted some portion of his ancestral land to his daughters in 1985 but five years later alleged that the daughters, taking advantage of his addiction to alcohol, had fradulently taken away the ancestral property which he could not have gifted.

The trial Court and the High Court had ruled in favour of the father saying he had no right to gift away ancestral property except for pious purposes.

The Bench said the question as to whether a particular gift was within reasonable limits or not has to be judged according to the status of the family at the time of making a gift, the extent of immovable property owned by the family and the extent of property gifts.

"No hard and fast rule prescribing quantitative limits of such a gift can be laid down. The answer to such a question would vary from family to family," Justice Bhan said.

Taking the case in hand, the Bench said the father had failed to plead the total extent of the ancestral immovable property of the family and prove that the gift was unreasonable taking the total extent of property into account.

Apart from this, the question of reasonableness or otherwise of the gift made has to be assessed vis-a-vis the total value of the property held by the family.

"Simply because the gifted property is a house, it cannot be held that the gift made was not within the reasonable limits," the apex Court said.

The Court said "it would depend on number of factors such as the status of the family, total value of the property held by the family and the value of the gifted property and so on."

However, on facts, if it was found that the gift was not within reasonable limits, such a gift would not be upheld, the Supreme Court said and added it was for those challenging the gift to prove that the gift made by the father was excessive or unreasonable, keeping in view, the total holding of the family.

[Source : Economic Times]

Lok Sabha clears Sick Cos Repeal Bill

TIMES NEWS NETWORK [FRIDAY, DECEMBER 12, 2003]

NEW DELHI : The Lok Sabha on Thursday passed the Sick Industrial Companies (Special Provisions) Repeal Bill, ’03, paving the way for the government to implement the amendments to the Companies Act, 1956, pertaining to insolvency of companies, that had been cleared by the Parliament during the ’02 winter session.

The repeal of the Act will result in the scrapping of the Board for Industrial and Financial Reconstruction and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), and in the creation of National Company Law Tribunal and National Company Law Appellate Tribunal as envisaged in the Companies (Second Amendment) Bill ’02.

The department of company affairs (DCA) has already set up a search panel to identify the members to be nominated to the tribunal. The NCLT is to be set up with a maximum of 62 members and a president, who is qualified to be a judge. The NCLT will subsume the jurisdiction of the Company Law Board and the BIFR. The jurisdiction of High Courts to approve mergers and acquisitions of companies would also be transferred to the new tribunal. The NCLT shall comprise of judicial and technical members.

Replying to a debate on the SICA Repeal Bill, finance minister Jaswant Singh said that the move would help in the expeditious rehabilitation of sick companies, which was not possible under the BIFR regime.

Cases pending with the BIFR were those where 100% net worth of the companies had eroded, Mr Singh said, adding that under the Companies Act, companies with erosion of 50% of its net worth would automatically be referred to the Tribunal.

The company concerned and its board of directors would then have to furnish information and the scheme for rehabilitation.

The minister informed the House that the Companies Act has special provisions to protect workers interests.

[Source : Economic Times]

Norms to check money laundering by Apr

PTI [WEDNESDAY, DECEMBER 10, 2003]

NEW DELHI: In a bid to check money laundering and terror funding through banking channels, RBI will come up with stringent directives for banks by April 2004, which among others, would enable the regulator to trace ‘suspicious’ transactions.

RBI intends to revamp the present ‘Know Your Customer (KYC)’ principle, come out with a blacklist of countries and people involved in terror funding and make it mandatory for banks to report ‘suspicious’ transactions, senior bank officials said.

The new guidelines would be implemented from the second quarter of 2004-05. RBI is co-ordinating with the finance ministry, especially the income tax department on this issue. Apart from RBI, the other two regulators, Sebi and Irda, would also put in place systems for tracing dubious transactions in the near future.

RBI deputy governor K J Udeshi did not like to divulge details but said “the impact of money laundering is now beginning to extend from economic crimes to international terrorism.”

“As financial transactions grow more complex, it becomes more difficult for banks to maintain a customer profile. The challenge, therefore, is to ensure that banks know their customers without hindering the smooth flow of financial transactions,” she said addressing a banking conference here.

Referring to RBI’s present guidelines on KYC principle, she said “the basic aim is to prevent banks being unwillingly used as a channel for funds derived from criminal activity or financing terrorism.”

The guideline relates to identification of depositors and systems and procedures to control financial frauds, of money laundering and suspicious activities and scrutiny and monitoring of large-value transactions, she said.

Confirming the developments, Oriental Bank of Commerce chairman B D Narang said monitoring of suspicious transactions would be tightened. Banks would be setting up ‘Anti-Money Laundering Cells’ for this purpose, which would co-ordinate with RBI, he said.

The banks are expecting the new RBI directive in April next year and it would be implemented by second quarter of 2004, he said. The move assumes importance in the wake of the new Money Laundering Act, which broadly laid down the guidelines. But RBI was asked to come up with detailed directive for enabling the government to trace money laundering and terror funding.

[Source : Economic Times]

Govt to push for early passage of Patents Bill

K G NARENDRANATH
TIMES NEWS NETWORK [MONDAY, DECEMBER 08, 2003]

NEW DELHI : There is bad news for pharma MNCs, and great relief to their domestic counterparts, as the government has drafted the Patents (Third Amendment) Bill and plans to push it for an early passage by the Parliament.

According to official sources, the amendment, primarily designed to meet the TRIPS obligation of extending product patents to pharma and agrochemical sectors effective from January 1, ’05, will not tinker with the provision of compulsory licensing. That is, grounds for issuance of the compulsory licence (CL) will not be expanded or fortified and will remain as they have been since the second amendment that became effective from May ‘03. “No country has a more effective safeguards against abuse of CL. We, therefore, don’t intend to tinker with the Chapter 16 of the Act that deals with CL,” officials said.

CL is the crucial determinant of the business models of pharma companies in the impending product patent regime. MNCs have been saying that the CL facility as it is today is too easily accessible and therefore will virtually negate just use of patents. The MNCs want the CL to be more sparingly available, while the Indian drug companies demand broader application of the licensing.

Broadly speaking, CL is a TRIPS-compliant vehicle to side-step patents, to enable the government to take steps to ensure accessibility and sometimes affordability of medicines to the population, given certain stated eventualities, particularly if and when the existence of the patent thwarts such objectives.

Definition of patentability also will not change under the new amendment, officials added. This means that pharma MNCs will not be allowed patent prolongation by seeking exclusivity for new uses, or dosage forms of the same invention, they added.

A patentable invention will continue to be something “new, involving an inventive step, and capable of industrial application,” and anything that does not stand to such scrutiny will be ineligible for patents. The contentious question of patenting of micro-organisms will also be addressed by the same norm, implying that micro-organisms as they occur in nature will not be patentable, while isolation of an organism by involving an inventive step might make the isolated organism patentable. “We clearly distinguish inventions from discoveries. Only inventions are patentable,” the sources clarified.

The maximum time allowable between filing of a patent and its sealing (grant) will be fixed as 26 months (This has been practically 5-6 years now in most cases until recently). In the principal legislation (the Act), there will only be a new incorporation regarding each phase of processing to the effect that the processing will be done “within the period prescribed.”

In the subordinate legislation, (the rules), the timeframes will be specified so that the maximum time for sealing from date of filing will be 26 months, officials said.

Currently, it is mandatory that filing and publication of an application are distanced by 18 months. This will be reduced to one month.

In order to facilitate export of drugs under the Paragraph 6 provision of the Doha declaration, the third amendment will bring a provision for issuance of “complementary compulsory licence” to an Indian company in case it obtains a licence from a foreign government for export of drugs under the CL.

The department of industrial policy and promotion will soon move a Cabinet note on the third amendment. The note has already been sent to ministries of science and technology and HRD, health and family welfare and chemicals and fertiliser for comments.

[Source : Economic Times]

The President has given his assent to the Patents (Amendment) Bill, 2002 as passed by the parliament in its Budget Session ending May 17, 2002. more...

RBI liberalises norms for joint ventures abroad

PTI [SATURDAY, DECEMBER 06, 2003]

MUMBAI: The Reserve Bank of India has permitted Indian listed companies to disinvest their holdings in a joint venture or wholly-owned subsidiary abroad.

This would be applicable in cases where it may result in a write-off of the capital invested to the extent of 10 per cent of the previous year's export realisation.

RBI, in a notification here today, said other terms and conditions and reporting requirements would remain unchanged in this regard.

[Source : Economic Times]

NRIs can make investments on non-repatriation basis

AGENCIES [SATURDAY, DECEMBER 06, 2003]

MUMBAI: The RBI has allowed investments by NRIs or persons of Indian origin (PIOs) in the capital of an entity or a proprietary concern on a non-repatriation basis, subject to certain norms. The amount invested would not be eligible for repatriation outside India provided it has been made by inward remittances out of non-resident external or foreign currency non-resident account or non-resident ordinary account, the central bank said in a notification to authorised dealers. The RBI pointed out that the investments were subject to the firm or proprietary concern not being engaged in any agricultural plantation or real estate business, or not holding any immovable property with a view to earning profit or earning income.

[Source : Economic Times] 

Bill seeks to slice tax refund rate

TIMES NEWS NETWORK [SATURDAY, DECEMBER 06, 2003]

NEW DELHI : THE government has introduced the Bill which seeks, among other things, to reduce the interest rate on direct tax refunds paid by the government and delayed payments by the assessee and prune the tax collection at source rate of IMFL.

The government had earlier promulgated an ordinance to reduce the interest rate on refunds from 8% to 6% and on delayed payments from 15% to 12% to align it with the market rates. Besides the Income Tax Act 1961, amendments are also required in the Wealth Tax Act, 1957 and the Expenditure Tax Act, 1987. The TCS on IMFL was pruned to 1%.

The Taxation Laws (Amendment) Bill, 2003, introduced by minister of state for finance Shripad Y Naik, also seeks to amend section 206C of the Income-tax Act, 1961, to reduce the TCS rate on alcoholic liquor for human consumption and scrap, timber and other forest produce, tendu leaves, besides excluding the Central Government, State Government, clubs and embassies from the definition of buyers.

It also seeks to clarify that collection of tax at source shall be made from buyers at each stage of sale of the specified goods except the last stage where the goods are purchased for personal consumption.

The other provisions include an income tax exemption on interest paid by the ship-breaking industry outside India for purchasing a ship from outside India for the purpose of ship breaking and a100% income tax deduction of the profits derived from export of wood based handicraft items keeping in view problems faced by exporters of such articles.

Introducing the Bill, Mr Naik, said the legislation was also required to give income-tax exemption to interest payable to the Nordic Investment Bank.

[Source : Economic Times] 

Govt okays issue of equity against ECBs

TIMES NEWS NETWORK [THURSDAY, DECEMBER 04, 2003]

NEW DELHI: In tune with ongoing liberalisation of FDI policies, the government on Wednesday permitted issue of equity shares against all external commercial borrowings (excluding those deemed as ECBs) received in convertible foreign currency (CFC).

The conversion of ECB into equity would be subject to meeting all tax liabilities and procedures, according to an industry ministry press release. Issue of equity shares against lumpsum fee, royalty and ECBs in CFC already due for payment/repayment, subject to all applicable tax liabilities and procedures have been permitted.

The government also plans to allow the FDI proposals involving conversion of ECB into equity through the automatic approval route, along with a few other categories of FDI.

[Source : Economic Times]

Bill for Income tax exemptions introduced in LS

PTI [ FRIDAY, DECEMBER 05, 2003]

NEW DELHI: A bill to grant income tax exemptions in certain areas and to reduce interest chargeable and payable to assessees was introduced in Lok Sabha today.

The Taxation Laws (Amendment) Bill, 2003, also aims to provide income tax exemption on interest paid by the ship-breaking industry outside India for purchasing a ship from outside India for the purpose of ship breaking.

The bill was necessitated in the wake of demands for providing 100 per cent income tax deduction of the profits derived from export of wood based handicraft items keeping in view unique problems faced by exporters of such articles.

"Certain trade associations made certain representations for giving income-tax benefit to all hand made based articles or things", says the Statement of Objects and Reasons of the bill.

Introducing the Bill, Minister of State for Finance Shripad Yesso Naik, said the legislation was also required to give income-tax exemption to interest payable to the Nordic Investment Bank, a multilateral financial institution constituted by Governments of Denmark, Finland, Iceland, Norway and Sweden, on a loan advanced by it to a project approved by the Central Government.

The bill also aims to reduce interest chargeable from the assessees and interest payable to the assessees under the Income Tax Act, 1961, the Wealth Tax Act, 1957 and the Expenditure Tax Act, 1987 in view of the reduction in the interest rates prevailing in the market.

[Source : Economic Times]

RBI simplifies rules for exporters

PTI [SUNDAY, DECEMBER 07, 2003]

MUMBAI: With a view to simplifying procedures and providing full flexibility to exporters, Reserve Bank of India has allowed them to write off outstanding export dues, and extend the prescribed period of realisation beyond 180 days, albeit subject to certain conditions.

The exporters, including status holders, would be permitted this facility provided the aggregate value of such export bills written-off (including reduction in invoice value) and bills extended for realisation does not exceed 10 per cent of export proceeds due during the calendar year and are not a subject of investigation by Enforcement Directorate or CBI or any other investigating agency, RBI said in a notification here today.

This facility would be available for exports undertaken after July one, 2003 and whose proceeds are due for realisation on January one, 2004 , it said.

In the case of exports where RBI has prescribed longer period of realisation, the facility would be available for exports prior to July 2003, but proceeds of which were due for realisation within the prescribed period of one year.

Exporters dealing with more than one authorised dealer (AD) can avail of this facility through each AD within the set limit, the central bank said.

However, exporters operating under a consortium of banks or with multiple banks would also have the option of computing the 10 per cent limit on an aggregate basis provided the lead bank or a nodal bank undertakes to verify the exporter's annual performance, it added.

[Source : Economic Times]

National Tax Tribunal ruffles legal feathers - AIFTP to contest Ordinance provisions

[November 4, 2003]

All mega tax payers of the country must be prepared to travel to the five places where the Benches of the recently constituted National Tax Tribunal (NTT) will be set up, if they are thinking of filing a tax appeal.

Did we hear someone say that the pendency of tax cases is bound to rise in the NTT also, as there would be only 10 Benches each of direct and indirect taxes, which was less than the collective number of Benches supposed to function in a High Court.

According to some leading tax advocates, if CAs and retired Chief Income-Tax Commissioners are going to sit on the NTT Benches, sooner or later, the legal fraternity may demand that they should be permitted to conduct tax audit or even statutory audit.

The setting up of a NTT through an ordinance without invoking a proper national debate on how and why such a major judicial body with full powers of the High Court seems to have encountered a serious challenge, ironically though, in the law courts. Tax experts and lawyers are questioning the constitutional validity of such an ordinance, especially when the National Tax Tribunal Bill 2003 was now pending before Parliament.

The All India Federation of Tax Practitioners (AIFTP) is planning to move the Bombay High Court this week to challenge the constitutional validity of NTT. Petitions are also likely to be filed by the same body in Ahmedabad, Andhra Pradesh, Rajasthan, and even Kolkata.

Eminent tax practitioners like Dr Debi Pal, former president of AIFTP, are said to be spearheading the movement against the NTT. The common view among tax lawyers is that such a body was thought of many times in the past, culminating in the Bill, and suddenly, why push it through so hurriedly with the help of an Ordinance, without a national debate.

Mr K. Shivaram, President of AIFTP, told Business Line from his Mumbai office, "While we have no quarrel with such a national body, various provisions of the NTT ordinance are highly questionable, especially as these deal with substantial questions of law". How can you appoint someone with no judicial training as a Technical Member on the NTT Bench? he asked. He said only 10 per cent of the tax appeals go to the High Courts as 90 per cent of these go to the Income Tax Appellate Tribunal (ITAT). And the tax department leads in the number of appeals filed, even though some 90 per cent of the cases in courts are decided in favour of the assessees.

What has actually ruffled weathers is the move to appoint tax administrators and chartered accountants on the NTT Benches with little or no exposure to substantial questions of law. A key question being raised is whether the NTT, which would replace the High Courts in disposal of all tax appeals, would have full independence enjoyed by the High Courts or will it be subjected to executive control ?

According to Mr A.K. Chatterjee, Chairman, Bar Council of West Bengal, the move to dispose of pending tax cases in High Courts through such a medium of a NTT was, in his opinion, unconstitutional. Judiciary is one of the pillars of our society and how can you truncate it like this? he asked.

Says Mr Narayan P. Jain, Professor of Law at West Bengal National University of Juridical Sciences: "This experiment of the Government may not succeed as the Supreme Court itself may be flooded with tax appeals, as the NTT verdicts may come too quickly, if non-judicial members are going to help decide the cases."

Pointing out that the NTT was not the solution for reducing pendency of tax cases in courts, he said, as felt by AIFTP, more Benches should be set up in High Courts for speedy disposal of tax appeals.

A major irritant among the various provisions, according to him, was section 15(4) of the Ordinance, which makes part payment of tax (25 per cent of tax or duty payable) mandatory, even before the matter is adjudicated.

This condition did not apply while filing appeals before High Courts. There is, however, a proviso, which says that the NTT may waive this condition, if it felt that it could cause undue hardship to assessees.

[Source : Business Line]

Cabinet okays for income-tax ombudsman

[November 3, 2003]

The Union Cabinet gave its nod for the setting up of an income- tax ombudsman to resolve individual complaints of tax payers and improve the quality of tax administration. However, no statutory powers will be vested with the ombudsman.

To begin with, the ombudsman will be established in the four metros - Delhi, Mumbai, Kolkata and Chennai. Complaints can be made if there are delays say, in issue of refunds beyond time limits prescribed by the CBDT, allotment of PAN, in disposal of rectification application of the assessee, in giving effect to appellate orders, release of seized books of accounts and assets after completion of proceedings under the IT Act and so on.

The powers of the ombudsman would include receiving complaints from the tax payer, seek explanations from IT officials, give prima facie findings on whether the grievance has any merit and suggest remedial redressal measures.

[Source : Economic Times]

RBI cannot grant banking licence to cooperatives: SC

PTI [October 31, 2003]

In a major ruling affecting the banking sector, the Supreme Court has held that Reserve Bank of India cannot grant banking licence to cooperative societies registered under Multi-State Act without the NABARD declaring it as a state, central or primary cooperative bank.

A Bench comprising Justice S N Variava and Justice H K Sema gave this ruling while directing the RBI to forthwith revoke the banking licence given to the Apex Cooperative Bank of Urban Bank of Maharashtra and Goa Ltd.

Rejecting the contention of RBI that it was competent to grant licence to a cooperative bank under Multi State Act, the Bench said so far as Banking Regulation Act was concerned, the term "cooperative bank" had a definite meaning and the RBI could not go by any other meaning given to the same term for the purpose of issuing banking licence.

"We hold that the RBI by virtue of its power under Section 22 of the Banking Regulation Act cannot grant licence to any cooperative bank unless it is a state cooperative bank or a central cooperative bank or a primary cooperative bank.

It would be necessary that a declaration under the NABARD Act must be first obtained," Justice Variava said writing for the Bench.

[Source : Press Trust of India]

Exporters get more options to file rebate claims

[October 30, 2003]

Exporters can now file rebate claims and execute bonds or a letter of undertaking at all Central excise commissionerates in the country. The facility has so far been available only in eight or 10 locations.

The facility of filing rebate claims by exporters has been extended to all commissionerates where ports, airports, land customs stations or export post offices are located, a finance ministry release said. This has been done taking into account the growing international trade through minor ports.

Exporters will now have more options to file claims for rebate of Central excise paid from the place where the export takes place. This is in addition to the facility of filing the rebate claims before the jurisdictional assistant or deputy commissioners where export goods are manufactured or warehoused. Exporters who export goods under bond or letter of undertaking without payment of excise duty will also benefit.

The government has been taking steps for trade facilitation with a view to reducing the transaction cost of exports which is estimated at as high as 14 per cent in some cases.

[Source : Economic Times]

National Tax Tribunal Ordinance challenged in Madras HC

[October 30, 2003]

The Madras High Court declined to stay implementation of a recent central ordinance creating a tribunal for disposing of tax appeals.

"We are not inclined to grant any ex-parte stay till the counter filed", a Division Bench comprising Chief Justice B Subhashan Reddy and Justice A Kulasekharan said while hearing a writ petition challenging the "National Tax Tribunal Ordinance" promulgated by the centre on october 16 last.

The Judges, however, made it clear that "if any appointment is made it will be subject to further orders as may be passed by this court".

The petitioner -- Revenue Bar Association, had sought to declare the ordinance as violative of the basic structure of the constitution and ultra vires of its articles 14, 19 (1) (g),123, 245, 246 and 323 (D).

The petitioner had also sought an interim stay of the ordinance till disposal of the petition.

Contending that the National Tax Tribunal Bill 2003 was pending before parliament, the petitioner said there was no emergent or extraordinary situation to warrant the ordinance.

Pointing out that the tribunal would replace high courts in disposal of tax appeals, the association claimed that the tribunal could not have the independence enjoyed by high court as it would be completely subjected to executive control.

[Source : Economic Times]

Last date for filing IT returns extended till Oct 3

PTI [ WEDNESDAY, OCTOBER 01, 2003 ]

NEW DELHI: The government has extended the last date for filing of income-tax returns to October 3 instead of September 30, which was a bank holiday.

The extension would be applicable to individuals, Hindu Undivided Families and other non-corporate assessees, which are not required to be audited as per Income Tax Act, an official release said here on Wednesday.

Earlier, the last date for filing of IT returns was extended from July 31 to September 30

[ Source  : Economics Times ]

Gifts to NRIs may come under automatic route,

SHAJI VIKRAMAN & HEMA RAMAKRISHNAN
TIMES NEWS NETWORK [ TUESDAY, SEPTEMBER 16, 2003]

NEW DELHI: The government is vetting a proposal to liberalise the norms on transfer of gifts from resident Indians to non-resident Indians by seeking to put such investment proposals on the automatic route subject to the sectoral caps.

The existing rules provide for gifts by local citizens to NRIs or Persons of Indian Origin who are close relatives upto a monetary ceiling of Rs 10 lakh. However, being secondary market transactions, such proposals have to be approved by the Foreign Investment Promotion Board (FIPB). The government is now looking at a proposal to allow these transactions without having to go through the FIPB route as long as they fall within the FDI caps.

“We need to have an administrative delegation of powers for gifting shares to NRIs abroad, instead of coming to the FIPB,” a senior finance ministry official said. The delegation of powers could be to the RBI.

The government in consultation with the RBI is also looking at raising the existing limit of Rs 10 lakh given the comfort provided by the foreign exchange reserves which have topped the $87bn mark. The liberalisation on this front could mainly in respect of shares or securities of companies which are not listed or information technology start-ups by further enhancing the monetary limit for gifting shares to relatives abroad.

But in the next round of liberalisation, a cap may well be imposed on the percentage of the equity capital of a company which can be transferred as gifts instead of a monetary ceiling, according to officials. Otherwise, this route could well be misused, they reckon. A fuller opening up of the gift route would be in the last stage of capital account convertibility.

[ Source  : Economics Times ]

New IPR regulations come into force

TIMES NEWS NETWORK
[ TUESDAY, SEPTEMBER 16, 2003 ]

NEW DELHI: Marking yet another milestone in the ongoing “internationalisation” of India’s intellectual property rights (IPR)-related laws, the amended laws on trademark and geographical indications of goods came into effect on Tuesday.

The changed pieces of legislation would enable compatibility of these parts of India’s IPR legal structure with the TRIPS agreement.

The Intellectual Property Appellate Board in Chennai would now be operational with Justice S Jagadeesan, formerly of the Madras High Court, as its chairman, according to a press note issued here today by the Department of Industrial Policy and Promotion (DIPP).

The vice-chairman of the board would be Raghbir Singh, former secretary, National Commission, who will review the working of the Constitution, while TS Subramanian, former joint registrar of trademarks, would be a member. Benches of the Appellate Board will also sit in Ahmedabad, Delhi, Mumbai and Kolkata in addition to Chennai, the government has said.

The two new pieces of legislation — the Trade Marks Act 1999 and the rules thereunder notified in February ‘02 and the Geographical Indications of Goods (Registration & Protection) Act 1999 and the rules thereunder published in March ‘02 — essentially aim at strengthening the IPR protection in the respective        areas.

As for the trademarks, the amended Act would provide for 10-year term for trademark registrations as against seven years at present. It would also introduce concepts of “service marks” and “collective marks” to the Indian system. Besides, a new genre called “well-known marks” would be created. The marks qualified as well-known marks under specified criteria would receive higher levels of protection as they are more vulnerable to presumptive imitations. There would also be a provision for single register and simplification of procedures.

The proposed changes would be in tune with the rise in economic value of trademarks as corporate assets. Under the new system, contesting the validity of a registered mark would be more difficult. The amended Act on geographical indications of goods would, for the first time in India, provide for registration and better protection of geographical indications in relation to merchandise that derive their exclusivity from their place of origin such as Basmati rice, Darjeeling Tea, Agra petha, Bikaner bujia or Kancheepuram saree. These products, if the respective communities so wish, would now have stronger protection from fraudulent copycats, than what they currently may have under the “certificates of trademark”.

The new GE registry has been set up in Chennai and the government would begin receiving applications to the registry. The change in the law is on the lines of the British and French laws in this regard that frustrate deceitful commercial use of the celebrated distinctions of products such as Scotch whisky and Champagne. The applicant would have to register not only the product by name, but also comprehensively describe for record the distinguishing features of the product.

An expert committee would verify the claims before granting the registration. As a form of IPR, geographical indications are distinct from other forms like patents, trademarks and copyrights, because the ownership of the rights in this case is with a “community” or a “group of people” rather than an individual or a corporate or non-corporate firm as is the case with other IPRs.

[ Source  : Economics Times ]

Govt. Extends TDS Returns date to November 30.

[TUESDAY, SEPTEMBER 09, 2003]

The Government has extended the last date of filing Tax Deducted at Source (TDS) Return by two months to November, 30. Returns have to be filed for tax deducted in the previous year 2002-2003.

The last date for filing TDS returns was earlier extended uniformly to September, 2003 to give effect to certain proposals in the Finance Act, 2003 relating to the filing of TDS returns.

As per the provisions of the Income Tax Act, 1961, annual return for the TDS under various sections of the Act are to furnished by persons responsible for such deduction at end-April, May, June of the financial year following the previous year in which tax was deducted at source.

[ Source  : Economics Times ]

Cabinet Clears interest rate cut in tax refunds

[WEDNESDAY, SEPTEMBER 03, 2003]

The Union Cabinet has cleared finance ministry's proposal to reduce interest rate on delayed corporate and income tax refunds from 8% to 6% by aligning it with the weighted average rate of the 364 day T-Bill. The interest rate on delayed payments made by the assessee to Government will also be pruned from 15% to 12%. The Cabinet also cleared a cut in the rate on tax collection at source on Indian made foreign liquor and industrial scrap, from 10% less than 3%.

[ Source  : Economics Times ]

I-T to follow fresh rules to scrutinise tax returns by cos.

TIMES NEWS NETWORK [SUNDAY, AUGUST 24, 2003]

NEW DELHI: The Finance Ministry has decided to release new guidelines for scrutinising tax returns filed by corporates.

The guidelines will be different from those for non-corporate assessees. The government will use the database available with the Centre For Monitoring Indian Economy (CMIE) to select cases for scrutiny of corporate assessees. The selection criteria may include book profits (above a certain limit), paid-up capital, debt raised during a financial year and so on.

The decision to have separate guidelines for these segments marks a policy change as there has been no such distinction till now. The move comes six months after the FM’s announcement to abolish the discretion-based system of selecting returns. A computer-generated random selection of about 2% of the returns annually will be brought in instead.

As it will take some more time to have a complete database on all taxpayers, a small window will be open for manual selection (search and seizure cases, surveys, frauds, scam cases and so on). Transfer pricing cases will be picked up for scrutiny wherever the aggregate value of the global transaction exceeds Rs. 5 crore and reference under the relevant section is made to the transfer pricing officer. For corporate assessees, 95% of the scrutiny cases will be computer generated.

[ Source  : Economics Times ]

100% tax benefit to business houses for sports' promotion

PTI [ TUESDAY, AUGUST 26, 2003]

NEW DELHI: In a move to give boost to sports in a big way, Prime Minister Atal Bihari Vajpayee on Tuesday said the government may consider granting 100 per cent tax benefit to business houses for promotion of various sports activities.

The Finance Ministry may consider the suggestion for granting 100 per cent tax benefit to business houses for creation and maintenance of sports infrastructure, sponsoring sports championships, and for sponsoring sportspersons for participation in international sports meets", he said inaugurating the All India Sports Congress.

He told a gathering of eminent sports personalities that he would convene a meeting of all the leading business houses to encourage them to substantially enhance their support to sports.

Besides acceding to the request to rename the existing Sports Development Fund as Prime Minister's Sports Development Fund and to treat it on par with the Prime Minister's Relief Fund to attract more contributions, he also announced that sports bodies would be allowed to generate their own resources for maintenance, upgradation and creation of facilities and "no deduction will be made from their non-plan allocation".

Urging sportspersons to develop a “strong winner's instint”, Vajpayee said as in most developed and even in some developing countries, the subject of sports needed to become an integral part of the educational curriculum and effective steps should be taken in this direction.

[ Source  : Economics Times ]

Dividend stripping: Assessees can't benefit

TIMES NEWS NETWORK [WEDNESDAY, AUGUST 20, 2003]

MUMBAI: A commissioner (Appeal), the first appellate authority on direct tax matters, has ruled that assessees cannot benefit from a dividend stripping transaction, jargon for buying MF units at the time of dividend announcement and selling it at post dividend price for recording a loss which is used to claim a tax benefit. The ruling is along the lines of similar rulings by appellate commissioners denying tax benefits for such transactions.

According to the CIT (A) in Mumbai, the intention behind most such transactions is not investment but tax avoidance. This is sufficient ground under the I-T Act to deny tax benefits.

Since the intention is to record a loss that can be used for setting off a gain (save tax), such transactions do not deserve the tax benefit intended to encourage genuine investments, the Commissioner (Appeals) held.

It is learnt many assessing officers and appellate commissioners have ruled against assessees seeking tax benefits through dividend stripping. The I-T department says everybody involved in the transaction benefits except the exchequer.

The finance company that lends money to buy MF units benefits as does the mutual funds because of the increased demand for its units. The broker who arranges the deal also gets a commission.

Finally the taxpayer who can set off his gains against the artificial loss recorded through these means also benefits.

The grounds given by the Commissioner (Appeal) are as follows: the motive for the original purchase of units was quick profit and not investment. The shorter the period, the greater the probability that the intention was not investment.

[ Source  : Economics Times ]

Finmin wants more 'persons' in info-tax net

TIMES NEWS NETWORK [TUESDAY, AUGUST 19, 2003]

NEW DELHI: Stock-brokers, car dealers and other assessees may not be the only ones who will be required to file annual information returns from the ensuing financial year. The finance ministry is looking at widening the ambit to include persons who are not necessarily assessees.

The move will require an amendment to the Income Tax Act, which states that any “assessee” who conducts a financial transaction - specified by the revenue department - will have to furnish an annual information return about those involved in the transaction within a stipulated time period. The idea is to replace the word “assessee” with “person” so that the responsibility to furnish details falls on whomsoever the department wants to collect information from, even if they are not assessees. Internal consultations have been kicked off to finalise the class and value of transactions for which information returns have to be furnished. The law ministry will have to be consulted in case a decision is taken to widen the coverage.

The objective of the mandatory filing of information returns is to keep a tab on high net worth individuals. The tax information network (TIN), which is expected to be in place soon, will receive information returns for digitisation on behalf of the tax administration.

The move to insert a new section in the Income Tax Act relating to the furnishing of annual information returns from assessment year ‘04-05 (financial year ‘03-04) was based on the recommendations of the Kelkar Committee.

Under the present dispensation, the central information branch (CIB) functioning under the director general (investigation) collects information relating to financial transactions from various external and internal sources. The CBDT, in its long-term action plan for information collection, has listed out 37 broad categories of external and internal sources. The power to call for information (Section 133 B) and the powers relating to producing evidence (Section 131) constitute the main legal base for the process. Besides, the department has also made it mandatory for assessees to quote PAN for designated transactions.

Under Section 133 (6) of the IT Act, firms, companies, dealers, brokers, agents, banks can be called upon to provide the name and address of persons engaged in transactions with them. The information is then disseminated to the CIB. The existing system, it is reckoned, has not delivered results.

[ Source  : Economics Times ]

Senior citizens can certify own income for I-T

AGENCIES [TUESDAY, AUGUST 19, 2003]

NEW DELHI: In a major relief to senior citizens, the government today reverted to the old system of self-declaration of income for filing tax returns.

A notification from the Central Board of Direct Taxes said Income Tax rules of 1962 have been amended to allow senior citizens to furnish a self-declaration in the prescribed

Form-15H. The self-declaration facility was withdrawn in Budget 2002, in case the income or the aggregates of specified income exceeded Rs 50,000 per annum.

[ Source  : Economics Times ]

Electronic filing of IT returns from Friday

PRIYA RANJAN DASH
TIMES NEWS NETWORK [THURSDAY, AUGUST 07, 2003]

NEW DELHI: The finance ministry on Wednesday announced that salaried taxpayers can avail the facility to file their income-tax return electronically from Friday. This is an optional scheme and offers an additional mode of filing returns to the taxpayers.

Finance Minister Jaswant Singh had announced the scheme in the budget this year. In the first stage, it will be introduced in Chennai, Kolkata, Mumbai, New Delhi, Ahemdabad, Bangalore and Hyderabad.

Under the scheme, an eligible taxpayer can furnish his return to one of the intermediaries authorised for this purpose, who will transcribe and transmit the data on the paper form to IT department. The intermediaries will also provide the facility of preparing the returns of income of taxpayers at their request on the basis of documents provided by these taxpayers.

It will be the responsibility of the intermediary to file the 'e-Return' as also the paper return in the income tax office and deliver the acknowledgement to the taxpayers.

Intermediaries will also provide additional value-added services like door-step collection and delivery of documents, at their option.

The returns filed under this scheme will be processed on priority basis and refunds, if any, will be issued within one month from the date of filing of the paper return.

For the current financial year, Bharat Overseas Bank, ICICI Bank, HDFC Bank, Indian Overseas Bank, IDBI Bank and UTI Bank have been authorised to act as intermediaries.

[ Source  : Economics Times ]

Govt, trade bodies discuss Patent Act amendments

TIMES NEWS NETWORK [WEDNESDAY, AUGUST 06, 2003]

NEW DELHI: The government has kicked off the process for the third amendment to the Patents Act 1970, which would mark the introduction of the TRIPS-mandated product patents regime in the country for food, drugs and pharmaceuticals and chemicals. The amendment would also throw open the possibility of introducing provisions that cater to domestic constituency, even as the country’s obligation of making the legislation TRIPS-compliant before the year ’05 is being fulfilled.

Beginning the consultation process for the third amendment, the department of industrial policy and promotion (DIPP) today organised a one-day session with Assocham, CII and Ficci and a cross-section of various IPR-related interest groups and stakeholders. Inaugurating the session, commerce and industry minister Arun Jaitley said the amendment would be fully balanced with the concerns of national and public interest, especially those relating to public health in India.

With the process being set in motion, issues on which the stakeholders are at loggerheads even after the first and second amendments of ’99 and ’02 - grounds for issuance of compulsory licences, `parallel imports’ and `exhaustion of patent rights’, `technology transfer’, `patentable inventions’, `abuse of patents’ and sundry definitions - are being placed afresh for debate. ``This is the next milestone in India’s IPR law. We propose to have extensive consultations with all stakeholders before finalising the provisos,’’ the official said. The government is planning to hold 15-20 interactive sessions in different cities in the country in the next six to eight weeks.

Referring to the debate a decade ago which was marked by apprehensions that medicines would have to be paid for in dollars due to signing of TRIPS agreement by India, Mr. Jaitley said: "Let alone having to pay in dollars, India is getting ready to supply quality drugs to the rest of the world, at prices equivalent in rupees. This is a significant change that has taken place in the last one decade.’’

With our large knowledge base and propensity for research, why should we be on the backfoot as far as IPR protection is concerned?, asked the minister. The first amendment to the Patents Act had extended the facility of product patents to agrochemicals and pharmaceuticals.

The second amendment in ‘02 incorporated national emergency, circumstances of extreme urgency and for public non-commercial use of patented product as grounds for invoking compulsory licence. It also explained, although not to the satisfaction of all, what would and would not be patentable. Now, there are demands for review of the grounds for compulsory licensing, as the second amendment allegedly did not make full use of the flexibility provided by Doha Declaration on TRIPS and public health. Some feel that abuse of patent rights by the patentee -- reckoned on the basis of high price or lack of insufficient availability - can be a ground for issuing CL and the patentee should not be required to be convinced of the abuse by the seeker of compulsory licence. Also, since the patentee is deemed to have exhausted his right when there is case for parallel import from a secondary source, the question of payment of royalty to the patentee should not arise. The patentee should be mandated to transfer the technology to the CL holder, on payment of incremental royalty. In addition to national emergency, a ``health emergency’’ should also be reason for invoking CL. Health emergency should be distinctly defined and the power to declare such emergency should vest with the health ministry. Declaring a national emergency is process that requires legislative and presidential assents and there should be broader ground for invoking CL and under easier practical terms.

There should also be differential appeals for economic and legal issues. While the proposed appellate tribunal, as brought in with the second amendment, can settle disputes when the patent controller’s decisions are questioned, an administrative committee should arbitrate disputes of economic purport. While the first amendment to the Act in ’98 provided for product patents in pharmaceuticals and agro-chemicals, there is demand that product patents be given for food and fine chemicals as well.

The government is taking note of these proposals from the domestic lobbies as well as grouse of some multinational corporations, mainly pharma MNCs, that India’s patent law is weak and not completely TRIPS-compliant, while attempting the Third Amendment.

[ Source  : Economics Times ]

SC bans strike by Government employees

ECONOMICTIMES.COM [WEDNESDAY, AUGUST 06, 2003]

NEW DELHI: In a landmark judgement, the Supreme Court on Wednesday ruled that government employees under no circumstances have any fundamental legal or moral right to go on strike.

Delivering a judgement, while disposing of petitions pertaining to Tamil Nadu government employees strike, a Bench comprising Justice MB Shah and Justice AR Lakshmanan said "even the trade unions, who have a guaranteed right for collective bargaining, have no right to go on strike".

Justice Shah writing the judgment for the bench said "no political party or organisation can claim a right to paralyse the economic and industrial activities of a state or nation or inconvenience citizens."

The bench said, government employees cannot complain that they can hold society to ransom by going on strike to ventilate their grievances.

Justice Shah said there are various other ways for ventillating the grievances and observed "strike results in total chaos and mal-administration."

In a major concession, the Tamil Nadu government had on Tuesday agreed to take back 8,063 employees out of the 14,135 not reinstated even as the Supreme Court directed appointment of three retired Judges of the Madras High Court to decide within a month representations of the dismissed staff.

Terming the concession as "gracious", a Bench comprising Justice MB Shah and Justice AR Lakshmanan had also directed the State to treat 2,794 secretariat staff and government employees holding higher posts as having been placed under suspension instead of being dismissed.

The state government had dismissed 1.76 lakh employees invoking an ESMA Ordinance but on the intervention of the apex Court had agree to take back 1,56,106 employees who furnished an apology and undertaking not to indulge in strike in future.

[ Source  : Economics Times ]

Trade unions flay SC's verdict on strikes

IANS [WEDNESDAY, AUGUST 06, 2003]

NEW DELHI: Trade unions and Opposition parties reacted with anger and shock on Wednesday to a Supreme Court ruling that government employees had no legal or moral right to strike work.

Labelling the judgement retrograde, unprecedented and an attack on the basic tenets of democracy, trade union leaders said they were horrified.

"This is a conspiracy to snatch our fundamental right to strike. Nobody can take it away. If it is taken away, then what is left of the trade unions? Nothing," said Swadesh Deb Roy, secretary of the Centre for Indian Trade Union (CITU).

"So it is matter of life and death for us," Deb Roy said.

Stating that protests against the ruling would be carried to the streets nationally, Roy said that the continuing free market reforms unlashed a decade ago was to blame for the "retrograde judgement".

"All this is happening because of the growing influence of globalisation, privatisation and liberalisation. We condemn it. We strongly condemn it," he asserted.

The CITU, which is linked to the CPM, said that a day might well come when all civil rights would be taken away.

"Today, it is state government employees, tomorrow it will be central government employees, then it will industrial workers. Then one day all civil rights can be taken away. All these are authoritarian tendencies. Basic fundamental questions are involved," he maintained.

Prakash Karat, a CPM leader, echoed the strong sentiments.

"This is a judgement more in tune with the liberalisation policies initiated for about a decade. It reflects that ethos. This will be unacceptable for all democratic forces in the country," Karat said.

He added that the unprecedented judgement took away, at one stroke, the right to strike from government employees.

"Not only that, the judgement goes on to make unwarranted attacks on political parties and on the right to organise democratic protests and activities. This will gladden those who do not want any opposition to their control and dominance over the economic assets of the country," Karat said.

Agreeing with him, CPI's Atul Kumar Anjaan said that the verdict would have far-reaching consequences on the country's political, social and economic life, especially trade union activities.

Said Anjaan: "The Constitution guarantees collective bargaining. In a democratic country, one of the rights is the right to strike. We are a democracy, and in a democracy the right to protest is very much there. We are not living under a monarchy or military or dictatorial rule. Curbing the right to strike is like minimising people's rights."

The apex court delivered the controversial verdict while hearing the Tamil Nadu government employees strike case.

The two-judge bench said: "Even the trade unions, who have a guaranteed right for collective bargaining, have no right to go on strike."

It went on to add: "No political party or organisation can claim a right to paralyse the economic and industrial activities of a state or nation or inconvenience citizens."

[ Source  : Economics Times ]

Centre to review efficacy of entry level FDI norms

TIMES NEWS NETWORK [TUESDAY, AUGUST 05, 2003]

NEW DELHI: Foreign investors may not have to be bound by what they had originally committed to the authorities, if the worrisome FDI norms were subsequently done away with.

The government has decided to take afresh a broad policy view as to whether entry level conditions would continue to apply if they had become superfluous later.

What the government would be looking at chiefly would be foreign investors’ demands for waiver of entry level conditions in sectors where FDI ceilings have been hiked. The Foreign Investment Promotion Board (FIPB) has been getting a number of applications asking it to dispense with the conditions that are not in conformity with the hike in FDI caps and, therefore, virtually deny foreign investor the benefit of the liberalisation. Last week, the Board unanimously decided to defer decisions on such proposals until the policy position is clarified.

The immediate trigger for government’s decision to review the policy was a proposal of $5.4-bn German clinical nutrition and fluid therapy major Fresenius to make its Pune-based Indian subsidiary, Fresenius Kabi, a wholly owned arm. In ’98, Fresenius was told that it would have to divest 26% of the equity in favour of local investors. The MNC has now sought a waiver of this condition, given the fact that 100% FDI is now allowed in the pharmaceutical sector whereas when the MNC made its original proposal, the FDI permissible in the sector was 51%.

Fresenius had, in ’98, bought the equity held by Arvind Mafatlal group. Official sources told ET that the department of industrial policy and promotion (DIPP), the nodal department for FDI policy, would now clarify the policy position of the government on such proposals which had become recurrent of late. Representatives of the department of economic affairs (DEA) in the FIPB had argued for unburdening the foreign investors of conditions that are at variance with existing policy. The investors should not be approaching the FIPB with such requests in the era of liberalisation, the DEA had felt.

[ Source  : Economics Times ]

Committee to study quick transfer of tax

challan from Banks
PTI [SUNDAY, AUGUST 03, 2003]

NEW DELHI: Reserve Bank of India has constituted a High Powered Committee for setting up facilities for online transmission of tax payment data from banks to the income tax department.

This is in wake of the recommendations of the Task Force headed by Vijay Kelkar which had recommended a revised procedure for collection of taxes and their accounting.

Under the new procedure it is proposed that a tax payer will be required to fill up only one copy of the challan while making payment of the tax in the bank.

The present requirement of filling up four copies of challan for payment of direct taxes is proposed to be given up, according to finance ministry sources.

Under the new proposal, banks will be networked to Tax Information Network and will receive payment on line from the tax payers, the sources said adding it is also recommended that since the Tax Information Network will digitise all TDS returns, the requirement to file TDS certificate alongwith the return of income may also be dispensed with.

It is to implement these suggestions that the RBI has set up the committee.

The proposed Tax Information Network will contain information on deduction of taxes at source, payment of direct taxes made in various banks, information relating to high value financial transactions and those relating to returns of income, taxes due and taxes refundable.

The proposed tax information network will have different components, the sources said, adding it is expected that the first component relating to digitisation of TDS return will be completed in the current financial year.

The remaining components are expected to be operationalised in 2004-05 financial year, the sources said.

[ Source  : Economics Times ]

SC strikes down provision of Succession Act

PTI [ WEDNESDAY, JULY 23, 2003]

NEW DELHI: The Supreme Court while striking down a provision for Indian Succession Act has observed that a Common Civil Code would help the cause of national integration.

The judgment was delivered by a three-judge Bench headed by Chief Justice V N Khare while allowing a petition filed by one John Valliamatton challenging the constitutional validity of Section 118 of the Indian Succession Act imposing restriction on a person to donate by means of a will his property even if he had loving near relatives.